CREDIT
FACILITY AGREEMENT

     

    AGREEMENT by and between
Protalex, Inc., a Delaware corporation (the “Company”) and Niobe
Ventures, LLC, a Delaware limited liability company (“Niobe”), dated as of
December 2, 2009.

     

    WHEREAS, the Company is
seeking a credit facility of $2.0 million;

     

    WHEREAS, Niobe is the holder
of a Senior Secured Convertible Note made by the Company in the principal amount
of $1.0 million (the “Outstanding Note”);
and

     

    WHEREAS, Niobe wishes to make
a $2.0 million credit facility available to the Company;

     

    NOW THEREFORE, the parties
hereby agree as follows:

     

    1.      
     Credit
Facility.

     

    (a)           Niobe
hereby agrees that it will make available to the Company up to $2.0 million in
the form of secured loans at the request of the Company made at any time prior
to June 30, 2012 (the “Expiration Date”)
upon the occurrence of the following events (each a “Benchmark” and
collectively the “Benchmarks”):

     

    [(i)      
    up to 25% of the facility in the aggregate may be drawn
upon the occurrence of the commencement of the Phase 1B clinical trial of PRTX
100 in South Africa (the “RA
Trial”);

     

    (ii)           up
to 25% of the facility in the aggregate may be drawn upon six (6) months
following the commencement date of the RA Trial; and

     

    (iii)          up
to 50% of the facility in the aggregate may be drawn upon the results of the RA
Trial demonstrating the safety and efficacy of PRTX 100 in the RA Trial patients
following repeated dosing.

     

    (b)           Niobe
shall only be obligated to make loans to the Company hereunder to the extent
that the Benchmarks have been achieved and the other conditions set forth herein
are met.

     

    (c)           Notwithstanding
anything to the contrary that may be contained herein, in no event shall Niobe
be required to loan the Company more than $2.0 million hereunder, or to make any
loan at any time after the Expiration Date.

     

    2.         
  Request
for Loans.

     

    At any
time prior to the Expiration Date, the Company may request that Niobe make a
loan to the Company by submitting to Niobe a written request therefor (a “Loan Request”), which
Loan Request must contain: (i) the amount of the loan requested to be
made  (which must be a minimum of $250,000); (ii) those Benchmarks, if
any, that have been achieved; and (iii) the aggregate principal amount of all
loans made to the Company by Niobe pursuant to this Agreement prior to such
request.  Such Loan Request must be accompanied by a written
certification signed by an executive officer of the Company certifying that no
Event of Default has occurred and is continuing under the Outstanding
Note.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    3.     
      Loans.

     

    (a)           Within
ten (10) days of the receipt of such Loan Request, Niobe shall make a loan to
the Company in an amount equal to the lesser of (i) the amount sought in such
Loan Request, or (ii) (A) $2.0 million multiplied by (B) the percentage set
forth next to the greatest Benchmark that has been achieved by the Company as of
the date of such Loan Request, minus (ii) the aggregate amount of all loans
previously made to the Company by Niobe pursuant to this Agreement (the “Available
Amount”);

     

    (b)           If
the amount sought in such Loan Request is in excess of the Available Amount,
Niobe, in its sole and absolute discretion, may (but shall not be required to)
make a loan to the Company for all or any portion of such excess.

     

    (c)           Each
loan made to the Company by Niobe shall be represented by a Senior Secured
Convertible Promissory Note in the form of Exhibit A annexed
hereto (a “CF
Note”); provided that (i) Conversion Price in Section 3(b) of such CF
Note shall be equal to the Conversion Price that would be in effect pursuant to
the provisions of the Outstanding Note in effect on the day that such CF Note is
made (whether or not the Outstanding Note is then outstanding), and (ii) the
maturity date shall be the later of the fifteen month anniversary of the date
the loan is made or December 31, 2012.

     

    (d)           The
obligations of the Company pursuant to each CF Note shall be secured by a first
priority perfected security interest in all of the assets of the Company
pursuant to the Amended and Restated Security Agreement in the form of Exhibit B annexed
hereto.

     

    4.         
  Notices.

     

    All
notices or other communications which are required or permitted hereunder shall
be in writing and sufficient if delivered personally or sent by
nationally-recognized overnight courier or by registered or certified mail,
postage prepaid, return receipt requested or by facsimile, with confirmation as
provided above addressed as follows:

     

    If to
Company:

    


    Protalex,
Inc.

    145 Union
Square Drive

    New Hope,
PA 18938

    Attention:
Chief Financial Officer

    


    With
copies to

    


    Morse,
Zelnick, Rose & Lander LLP

    405 Park
Avenue, Suite 1401

    New York,
NY  10022

    Attention:  Kenneth
S. Rose, Esq.

    Fax:  212-838-5030


    
      
         


      

      
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    If to
Niobe:

    


    Niobe
Ventures, LLC

    c/o
Arnold P. Kling

    712 Fifth
Avenue, 11th
Floor

    New York,
NY 10019

    Attention:
Arnold P. Kling, Manager

    Fax:  212-713-1818


     

    5. 
          Governing
Law.

     

    All questions concerning the
construction, validity, enforcement and interpretation of this Agreement, and
any claim, controversy or dispute arising under or related to this Agreement,
the relationship of the parties, and/or the interpretation and enforcement of
the rights and duties of the parties hereunder shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state or federal
courts sitting in the City of New York, Borough of Manhattan (the “New York
Courts”). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, or such New York Courts are improper or
inconvenient venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of this Agreement,
then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its attorney’s fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.

     

    6.        
   Waiver.

     

    Any waiver by the Company or Niobe of
a breach of any provision of this Agreement shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any
other provision of this Agreement.


    
      
         


      

      
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    7.         
  Severability.

     

    If any
provision of this Agreement is invalid, illegal or unenforceable, the balance of
this Agreement shall remain in effect, and if any provision is inapplicable to
any person or circumstance, it shall nevertheless remain applicable to all other
persons and circumstances.

     

    
      
        
          
            	 
      	
                    PROTALEX,
      INC.

                  
	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      	
                      Kirk
      M. Warshaw

                  
	 
      	 
      	
                        Chief
      Financial Officer

                  
	 
      	 
      	 
      
	 
      	
                    NIOBE
      VENTURE, LLC

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      	
                     Arnold
      P. Kling

                  
	 
      	 
      	
                     Manager

                  


          

        

      

    

     

    
      
         


      

      
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    EXHIBIT
A

    


    THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE SOLD,
PLEDGED, OFFERED FOR SALE, ASSIGNED OR TRANSFERRED UNLESS (a) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT, AND ANY
APPLICABLE STATE SECURITIES LAW REQUIREMENTS HAVE BEEN MET OR (B) EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND THE REGISTRATION
OR QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS ARE
AVAILABLE.

    


    FORM OF SENIOR SECURED
CONVERTIBLE NOTE

    


    
      
        	
                $____________

              	
                __________,
      20__

              
	 
      	
                New
      York, New York

              


      

    

    


    FOR VALUE RECEIVED, Protalex,
Inc., a Delaware corporation (the “Company”), promises to pay to the order of
Niobe Ventures, LLC (“Holder”), at the offices of Morse, Zelnick, Rose &
Lander LLP, 405 Park Avenue, Suite 1401, New York, New York 10022, the principal
sum of ____________ (US$_____________) with interest thereon at the rate of
three percent (3%) per annum.  Any amounts that remain unpaid after
the Maturity Date shall thereafter bear interest at the rate of twelve percent
(12%) per annum.  Interest as aforesaid shall be calculated on the
basis of actual number of days elapsed over a year of 360 days.

    


    The
principal amount and all accrued interest of this Note is due on ___________,
20__] (the “Maturity Date”).

    


    This Note
is subject to the following additional provisions:

    


    Section
1.             Definitions. For the
purposes hereof, in addition to the terms defined elsewhere in this Note: (a)
capitalized terms not otherwise defined herein have the meanings given to such
terms in the Purchase Agreement, and (b) the following terms shall have the
following meanings:

    


    “Alternate
Consideration” shall have the meaning set forth in Section
4(d)(iii).

    


    “Business Day” means
any day except Saturday, Sunday and any day which shall be a federal legal
holiday in the United States or a day on which banking institutions in the State
of New York are authorized or required by law or other government action to
close.

    


    “Common Stock” means
the common stock, par value $0.00001 per share, of the Company and stock of any
other class into which such shares may hereafter have been reclassified or
changed.

    


    “Common Stock
Equivalents” means any option, warrant, convertible note, preferred stock
or other instrument exercisable for, or convertible into, Common
Stock.

    


    “Conversion Date”
shall have the meaning set forth in Section 3(a) hereof.


    
      
         


      

      
         

        
          

        

      

      
         


      

    

    


    “Conversion Price”
shall have the meaning set forth in Section 3(b).

    


    “Conversion Shares”
means the shares of Common Stock issuable upon conversion of this Note or as
payment of interest, all in accordance with the terms hereof.

    


    “Event of Default”
shall have the meaning set forth in Section 5.

    


    “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

    


    “Facility Agreement”
means the Credit Facility Agreement, dated as of December 1, 2009 to which the
Company and the Holder are parties, as amended, modified or supplemented from
time to time in accordance with its terms.

    


    “Fundamental
Transaction” shall have the meaning set forth in Section 3(d)(ii)
hereof.

    


    “Original Issue Date”
means the date of the first issuance of this Note regardless of the number of
transfers of any Note and regardless of the number of instruments which may be
issued to evidence such Note.

    


    “Person” means a
corporation, an association, a partnership, organization, a business, an
individual, a government or political subdivision thereof or a governmental
agency.

    


    “Purchase Agreement”
means the Note and Common Stock Purchase Agreement, dated as of November 11,
2009 to which the Company and the Holder are parties, as amended, modified or
supplemented from time to time in accordance with its terms.

    


    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

    


    “Security Agreement”
means the Amended and Restated Security Agreement dated as of December 1, 2009
by and between the Company and the Holder.

    


    “Subsidiary” means any
Person in which the Company owns more than 50% of the outstanding
equity.

    


    “Transaction
Documents” means the Facility Agreement, the Security Agreement and this
Note.

    


    Section
2.             Registration of Transfers
and Exchanges.

    


    a)            Different
Denominations. This Note is exchangeable for an equal aggregate principal
amount of Notes of different authorized denominations as requested by the Holder
surrendering the same, No service charge will be made for such registration of
transfer or exchange.

    


    b)            Investment
Representations.  This Note has been issued subject to certain
investment representations of the original Holder set forth in the Purchase
Agreement and may be transferred or exchanged only in compliance with the
Purchase Agreement and applicable federal and state securities laws and
regulations.



    
      
         


      

      
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    c)            Reliance on Note
Register. Prior to due presentment to the Company for transfer of this
Note, the Company and any agent of the Company may treat the Person in whose
name this Note is duly registered on the Note Register as the owner hereof for
the purpose of receiving payment as herein provided and for all other purposes,
whether or not this Note is overdue, and neither the Company nor any such agent
shall be affected by notice to the contrary.

    


    Section
3.             Conversion.

    


    a)            Voluntary Conversion.
Subject to any shareholder approval that may be required to authorize enough
authorized but unissued common shares under the Company’s Certificate of
Incorporation, at any time after the Original Issue Date until this Note is no
longer outstanding, the principal and accrued interest due and payable under
this Note shall be convertible into shares of Common Stock at the option of the
Holder, in whole or in part at any time and from time to time, so long and only
to the extent that after taking into consideration all issued and outstanding
common stock shares and the maximum number of shares issuable under all issued
and outstanding convertible securities at the time of conversion, there remain
enough authorized but unissued shares under the Company’s Certificate of
Incorporation that are not previously reserved for issuance under such
convertible securities to effect conversion of this Note.. The Holder shall
effect conversions by delivering to the Company the form of Notice of Conversion
attached hereto as Annex A (a “Notice of Conversion”), specifying therein the
principal amount of Note to be converted and the date on which such conversion
is to be effected (a “Conversion Date”). If no Conversion Date is specified in a
Notice of Conversion, the Conversion Date shall be the date that such Notice of
Conversion is provided hereunder. To effect conversions hereunder, the Holder
shall not be required to physically surrender the Note to the Company unless the
entire principal amount of this Note plus all accrued and unpaid interest
thereon has been so converted. Conversions hereunder shall have the effect of
lowering the outstanding principal amount of this Note in an amount equal to the
applicable conversion. The Holder and the Company shall maintain records showing
the principal amount converted and the date of such conversions. The Company
shall deliver any objection to any Notice of Conversion within 3 Business Days
of receipt of such notice. In the event of any dispute or discrepancy, the
records of the Holder shall be controlling and determinative in the absence of
manifest error. The Holder and any assignee, by acceptance of this Note,
acknowledge and agree that, by reason of the provisions of this paragraph,
following conversion of a portion of this Note, the unpaid and unconverted
principal amount of this Note may be less than the amount stated on the face
hereof. However, at the Company’s request, the Holder shall surrender the Note
to the Company within five (5) Trading Days following such request so that a new
Note reflecting the correct principal amount may be issued to
Holder.

    


    b)            Conversion Price. The
conversion price in effect on any Conversion Date (subject to adjustment herein)
shall initially be equal to [$0.046] per share.

    


    c)            Mechanics of
Conversion

    


    i.           Conversion Shares Issuable
Upon Conversion of Principal Amount. The
number of shares of Common Stock issuable upon a conversion hereunder shall be
determined by the quotient obtained by dividing (x) the amount of this Note
(whether principal or accrued but unpaid interest) to be converted by (y) the
Conversion Price.

    


    ii.           Delivery of Certificate Upon
Conversion. Not later than five Trading Days after any Conversion Date,
the Company will deliver to the Holder at an address in the United States (A) a
certificate or certificates representing the Conversion Shares representing the
number of shares of Common Stock being acquired upon the conversion of Notes
(including, if so timely elected by the Company, shares of Common Stock
representing the payment of accrued interest) and (B) a bank check or wire
transfer in the amount of accrued and unpaid interest (if the Company is
required to pay accrued interest in cash).


    
      
         


      

      
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    iii.           Reservation of Shares
Issuable Upon Conversion. The Company covenants that it will at all times
reserve and keep available out of its authorized and unissued shares of Common
Stock solely for the purpose of issuance upon conversion of this Note (after
taking into account all existing issued and outstanding shares of Common Stock
and all shares reserved for issuance under the Company’s issued and outstanding
convertible securities), free from preemptive rights or any other actual
contingent purchase rights of persons other than the Holder, not less than such
number of shares of the Common Stock as shall be issuable (taking into account
the adjustments and restrictions of Section 4) upon the conversion of the
outstanding principal amount and accrued interest under this Note. The Holder
acknowledges that on the issuance date of this Note, the Company does not have
adequate shares authorized to fulfill the foregoing obligation; however, the
Company covenants and agrees that it will use its commercially reasonable
efforts after the Closing to obtain stockholder approval to authorize an
amendment to its Certificate of Incorporation to provide for an adequate number
of authorized shares of Common Stock to meet the obligation set forth in this
subsection  The Company covenants that all shares of Common Stock that
are issuable upon conversion of this Note shall, upon issuance, be duly and
validly authorized, issued and fully paid and nonassessable.

    


    iv.           Fractional Shares.
Upon a conversion hereunder the Company shall not be required to issue stock
certificates representing fractions of shares of the Common Stock, but may if
otherwise permitted, make a cash payment in respect of any final fraction of a
share based on the fair market value of a share at such time. If the Company
elects not, or is unable, to make such a cash payment, the Holder shall be
entitled to receive, in lieu of the final fraction of a share, one whole share
of Common Stock.

    


    v.           Transfer Taxes. The
issuance of certificates for shares of the Common Stock on conversion of this
Note shall be made without charge to the Holder for any documentary stamp or
similar taxes that may be payable in respect of the issue or delivery of such
certificate, provided that the Company shall not be required to pay any tax that
may be payable in respect of any transfer involved in the issuance and delivery
of any such certificate upon conversion in a name other than that of the Holder
of such Notes so converted and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been
paid.

    


    d)           Mandatory
Conversion.  If, at any time while this Note is outstanding,
(A) the Company effects any merger or consolidation of the Company with or into
another Person, (B) the Company effects any sale of all or substantially all of
its assets in one or a series of related transactions, (C) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (D) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a “Fundamental Transaction”),
then, immediately prior to the occurrence of such Fundamental Transaction the
principal and accrued but unpaid interest payable hereunder shall automatically
be converted into shares of Common Stock in accordance with the provisions of
Section 3(c) hereof.


    
      
         


      

      
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    Section
4.             Certain
Adjustments.

    


    a)            Stock Dividends and Stock
Splits. If the Company, at any time after the Issue Date while the Note
is outstanding: (A) shall pay a stock dividend or otherwise make a distribution
or distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock to all stockholders of
the Company (which, for avoidance of doubt, shall not include any shares of
Common Stock issued by the Company pursuant to this Note, including as interest
thereon), (B) subdivide outstanding shares of Common Stock into a larger number
of shares, or (C) combine (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, then the Conversion
Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock (excluding treasury shares, if any) outstanding
before such event and of which the denominator shall be the number of shares of
Common Stock outstanding after such event. Any adjustment made pursuant to this
Section shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.

    


    b)            Calculations. All
calculations under this Section 4 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. The number of shares of Common
Stock outstanding at any given time shall not includes shares of Common Stock
owned or held by or for the account of the Company, and the description of any
such shares of Common Stock shall be considered on issue or sale of Common
Stock. For purposes of this Section 4, the number of shares of
Common Stock deemed to be issued and outstanding as of a given date shall be the
sum of the number of shares of Common Stock (excluding treasury shares, if any)
issued and outstanding.

    


    c)            Notice to
Holder.

    


    i.           Adjustment to Conversion
Price. Whenever the Conversion Price is adjusted pursuant to any of this
Section 4, the Company shall promptly mail to each Holder a notice setting forth
the Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.

    


    ii.           Notice to Allow Conversion
by Holder. If (A) the Company shall declare a dividend (or any other
distribution) on the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the
Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights; (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock,
any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to mailed to the Holder at
its last address as it shall appear upon the stock books of the Company, at
least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided, that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate
action required to be specified in such notice. The Holder shall be entitled to
convert this Note during the 20-day period commencing the date of such notice to
the effective date of the event triggering such notice.


    
      
         


      

      
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    Section
5.             Events of Default.

    


    a)            Event of
Default.  Wherever used herein, means any one of the following
events (whatever the reason and whether it shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental
body):

    


    i.           any
default in the payment of (A) the principal, or (B) interest (including Late
Fees) on this Note as and when the same shall become due and payable (whether on
a Conversion Date or the Maturity Date or by acceleration or otherwise) which
default is not cured within ten (10) Trading Days after written notice from the
Holder;

    


    ii.           any
representation or warranty made herein, or in any other Transaction Document or
the Purchase Agreement or any certificate made or delivered to the Holder shall
be untrue or incorrect in any material respect as of the date when made or
deemed made; or

    


    iii.           (i)
there is commenced against the Company or any Subsidiary thereof a case under
any applicable bankruptcy or insolvency laws as now or hereafter in effect or
any successor thereto, or any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Company or any Subsidiary thereof which remains
undismissed for a period of 60 days; or (ii) the Company or any Subsidiary
thereof is adjudicated by a court of competent jurisdiction insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or (iii) the Company or any Subsidiary thereof suffers
any appointment of any custodian or the like for it or any substantial part of
its property which continues undischarged or unstayed for a period of 60
days.

    


    b)            Remedies Upon Event of
Default. If any Event of Default occurs, the full principal amount of
this Note, together with interest and other amounts owing in respect thereof, to
the date of acceleration shall become, at the Holder’s election, immediately due
and payable in cash. The Holder need not provide and the Company hereby waives
any presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law. Such declaration may be rescinded and annulled by Holder at any
time prior to payment hereunder and the Holder shall have all rights as a Note
holder until such time, if any, as the full payment under this Section shall
have been received by it. No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent
thereon.



    
      
         


      

      
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    Section
6.             Miscellaneous.

    


    a)            Notices. Any and all
notices or other communications or deliveries to be provided by the Holder
hereunder, including, without limitation, any Notice of Conversion, shall be in
writing and delivered personally, by facsimile, sent by a nationally recognized
overnight courier service, addressed to the Company, at 145 Union Square Drive,
New Hope, PA 18938, attention:  Chief Financial Officer, or such other
address or facsimile number as the Company may specify for such purposes by
notice to the Holder delivered in accordance with this Section. Any and all
notices or other communications or deliveries to be provided by the Company
hereunder shall be in writing and delivered personally, by facsimile, sent by a
nationally recognized overnight courier service addressed to the Holder at the
facsimile, telephone number or address of such Holder appearing on the books of
the Company, or if no such facsimile telephone number or address appears, at the
principal place of business of the Holder. Any notice or other communication or
deliveries hereunder shall be deemed given and effective on the earliest of (i)
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section prior to
5:30 p.m. (New York City time), (ii) the date after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 5:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the second Business Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given.

    


    b)            Absolute Obligation.
Except as expressly provided herein, no provision of this Note shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of, interest and liquidated damages (if any) on, this Note at
the time, place, and rate, and in the coin or currency, herein prescribed. This
Note is a direct debt obligation of the Company.

    


    c)            Lost or Mutilated
Note. If this Note shall be mutilated, lost, stolen or destroyed, the
Company shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated Note, or in lieu of or in substitution for a lost,
stolen or destroyed Note, a new Note for the principal amount of this Note so
mutilated, lost, stolen or destroyed but only upon receipt of evidence of such
loss, theft or destruction of such Note, and of the ownership hereof; and
indemnity, if requested, all reasonably satisfactory to the
Company.

    


    d)            Security Interest.
This Note is a direct debt obligation of the Company and, pursuant to the
Security Agreement all of the Company’s obligations hereunder are secured by a
first priority perfected security interest in all of the assets of the Company
for the benefit of the Holder.

    


    e)            Governing Law. All
questions concerning the construction, validity, enforcement and interpretation
of this Note, and any claim, controversy or dispute arising under or related to
this Note, the relationship of the parties, and/or the interpretation and
enforcement of the rights and duties of the parties hereunder shall be governed
by and construed and enforced in accordance with the internal laws of the State
of New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by any of the
Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced in the state or federal courts sitting in the City of New York,
Borough of Manhattan (the “New York Courts”). Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or such
New York Courts are improper or inconvenient venue for such proceeding. Each
party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Note and agrees that such service shall constitute good and sufficient service
of process and notice thereof Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Note or the transactions contemplated hereby. If either
party shall commence an action or proceeding to enforce any provisions of this
Note, then the prevailing party in such action or proceeding shall be reimbursed
by the other party for its attorney’s fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.


    
      
         


      

      
        7

        
          

        

      

      
         


      

    

    


    f)            
Waiver. Any
waiver by the Company or the Holder of a breach of any provision of this Note
shall not operate as or be construed to be a waiver of any other breach of such
provision or of any breach of any other provision of this Note. The failure of
the Company or the Holder to insist upon strict adherence to any term of this
Note on one or more occasions shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or
any other term of this Note. Any waiver must be in writing.

    


    g)            Severability. If any
provision of this Note is invalid, illegal or unenforceable, the balance of this
Note shall remain in effect, and if any provision is inapplicable to any person
or circumstance, it shall nevertheless remain applicable to all other persons
and circumstances. If it shall be found that any interest or other amount deemed
interest due hereunder violates applicable laws governing usury, the applicable
rate of interest due hereunder shall automatically be lowered to equal the
maximum permitted rate of interest. The Company covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law or other law which would prohibit or forgive the Company from
paying all or any portion of the principal of or interest on this Note as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this indenture, and due
Company (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantage of any such law, and covenants that it will not, by resort
to any such law, binder, delay or impeded the execution of any power herein
granted to the Holder, but will suffer and permit the execution of every such as
though no such law has been enacted.

    


    h)            Next Business Day.
Whenever any payment or other obligation hereunder shall be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day.

    


    i)        
     Headings. The
headings contained herein are for convenience only, do not constitute a part of
this Note and shall not be deemed to limit or affect any of the provisions
hereof.

    


    IN WITNESS WHEREOF, the
Company has caused this Note to be duly executed by a duly authorized officer as
of the date first above indicated.

    


    
      
        
          
            
              
                	 
      	
                        PROTALEX,
      INC.

                      
	 
      	 
      	 
      
	 	      
                        By: 

                      	 
	 
      	 
      	
                        Kirk
      M. Warshaw, Chief Financial
Officer

                      


              

            

          

        

      

    


    
      
         


      

      
        8

        
          

        

      

      
         


      

    

    


    ANNEX
A

    


    NOTICE OF
CONVERSION

    


    The
undersigned hereby elects to convert principal under the Senior Secured
Convertible Note of Protalex, Inc., a Delaware corporation (the “Company”), due
on ___________, 20__, into shares of common stock, par value $0.00001 per share
(due “Common Stock”), of the Company according to the conditions hereof, as of
the date written below. If shares are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates and opinions as
reasonably requested by due Company in accordance therewith. No fee will be
charged to the holder for any conversion, except for such transfer taxes, if
any.

    


    The
undersigned agrees to comply with the prospectus delivery requirements under the
applicable securities laws in connection with any transfer of the aforesaid
shares of Common Stock.

    


    Conversion
calculations:

    Date to
Effect Conversion:

    


    Principal
Amount of Notes to be Converted:

    


    Payment
of Interest in Common Stock_ yes _  no

    If yes,
$______ of Interest Accrued on Account of

    Conversion
at Issue.

    


    Number of
shares of Common Stock to be issued:

     

    Signature:

    


    Name:

    


    Address:



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
B


     

    [INTENTIONALLY
OMITTED]